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DECREE No

DECREE No. 197-CP ON THE 31ST OF DECEMBER 1994 OF THE GOVERNMENT DETAILING AND GUIDING THE IMPLEMENTATION OF A NUMBER OF ARTICLES ON WAGES OF THE LABOR CODE

THE GOVERNMENT

Pursuant to the Law on Organization of the Government on the 30th of September 1992;

Pursuant to the Labor Code on the 23rd of June 1994;

At the proposal of the Minister of Labor, War Invalids and Social Affairs,

DECREES:

Chapter I

OBJECTS AND SCOPE OF REGULATION

Article 1.- The objects and scope of regulation by Articles 2 and 3 of the Labor Code in terms of wages are laborers working in the following organizations:

1. State-owned businesses;

2. Businesses of other economic sectors;

3. Public service units operating according to the loss-profit accounting system;

4. Business and service organizations belonging to administrative and public service agencies, the armed forces, mass organizations, political and social organizations and other economic sectors which are allowed to register for operation;

5. Business with foreign investments, business in export processing zones, industrial parks;

6. Foreign agencies and organizations, international organizations based on Vietnamese territory and hiding laborers who are Vietnamese, except otherwise provided for in international treaties which the Socialist Republic of Vietnam has signed or acceded to.

Article 2.- The following objects and scopes are not regulated by Article 4 of the Labor Code:

1. Public employees and functionaries in administrative and public service agencies of the State;

2. The persons holding elected, appointed or assigned posts in State agencies;

3. The persons belonging to mass organizations and other political and social organizations under the statutes of these organizations; members of cooperatives;

4. Officers, non-commissioned officers and men of the armed forces.

Chapter II

MINIMUM WAGES, SYSTEM OF WAGE SCALES AND TABLES

Article 3.-

1. The minimum wage as defined in Article 56 and Item 2 of Article 132 of the Labor Code is the wage paid to the laborer doing the most simple job (without training) in formal labor conditions and environment.

2. Ministry of Labor, War Invalids and Social Affairs, after consulting the Vietnam General Confederation of Labor and the representative of the employer, shall submit the minimum wage for each period to the Government for decision and publication.

3. The Ministry of Labor, War Invalids and Social Affairs, after consulting the Vietnam General Confederation of Labor, the State Committee for Cooperation and Investment, and the representative of the employer, shall submit to the Government for announcement, or the Government shall empower the Ministry to announce, the minimum wage of Vietnamese laborers working in foreign-invested businesses, export processing zones, industrial parks, or foreign or international agencies and organizations in Vietnam.

Article 4.- The application of the wage scale and table under Article 57 of the Labor Cod is defined as follows:

1. The Government shall announce the wage scale and table, and the regime of allowances organizations, and public service units operating according to the loss-profit accounting and accountancy system in the State-owned economic sector.

2. The Ministry of Labor, War Invalids and Social Affairs shall bas itself on the wage policy of the State to guide the implementation of the wage regime in the businesses and the production, business and service organizations belonging to other economic sectors.

Chapter III

THE REGIME OF WAG AND BONUS PAYMENT

Article 5.- The forms of wage payment under Article 58 of the Labor Code are defined as follows:

1. The time wage is the form of payment to the laborers based on the real working time;

- The monthly wage is the fixed wage paid monthly on the basis of the labor contract;

- The weekly wage is the wag paid for a working week based on the monthly wage multiplied by 12 months and divided to 52 weeks;

- The daily wage is the wage paid for a working day based on the monthly wage divided to 26 days;

- The hourly wage is the wage paid for a working hour based on the daily wag divided to the number of standard hours defined at Article 68 of the Labor Code.

2. Piecework payment is payment to the laborers based on the quantity and quality of their products.

3. Package payment is payment to the laborers based on the volume and quality of the work they have to complete.

Article 6.- The special cases defined at Item 1 of Article 59 of the Labor Code are cases occasioned by electricity or water accidents; or resulting from the application of measures for preventing or overcoming labor accidents and occupational diseases; from the transfer of the working place, or from difficulties in production and business which the employer cannot overcome even after having resorted to very possible measure. In such cases, delay in wage payment is permissible but not for more than one month, and the employer has to make compensations to the laborer under the following terms:

- He shall have to make no compensation if the delay is less than 15 days.

- If the delay is from 15 days upward, the compensation shall represent at least the pay in arrears multiplied by the monthly interest rate for current bank deposit announced by the State Bank at the time of wage payment.

Article 7.- The deduction from the wage of the laborer under Item 1 of Article 60 of the Labor Code is defined as follows:

Basing himself on the monthly wage received by the laborer after payment of his social insurance and medical insurance premiums and his personal income tax, the employer shall gradually deduct the advance payment made under Article 67 and also deduct the compensations for material damage stipulated at Article 89 of the Labor Code.

Article 8.- Payment for overtime and night-time work under Article 61 of the Labor Code is defined as follows:

1. If payment is made according to the working time, the laborer shall be paid for his work outside the regulatory hours.

2. If payment is mad on the basis of piecework or package work, the laborer shall be paid for his overtime work, when the employer has the need to produce a grater quantity and volume of products than the quantity or volume to be achieved during the regulatory time.

3. The laborer working in night shift shall be paid additional wage representing at least 30% of the daytime pay if the night work is not regular, and at least 35% of the day-time pay if the work is done in regular night-shift (three-shift working regime) or is done regularly at nigh time.

Article 9.- The deduction from the remaining profit (after making the regulatory remittances to the State) as bonus to laborers having worked at the business for on year or more under Article 64 of the Labor Code, is defined as follows:

1. With regard to the businesses, and business and service organizations belonging to the State-owned economic sector, the maximum bonus shall not exceed six months' wage under the labor contract.

2. With regard to the businesses with foreign investment, businesses in the export processing zones and the industrial parks, the bonus shall be mutually aggressed upon, but shall not be lower than one month's wage under the labor contract.

3. With regard to private businesses, the bonus shall be mutually agreed upon, but must not fall below 10% of the profit.

Article 10.- The advance payment to the laborer under Items 1 and 2 of Article 67 of Labor Code is defined as follows:

1. The laborer shall receive payment of his wage when he/she or their family meets with difficulties, the advance payment represents at least one month's wage. The mode of advance payment of wage shall be mutually agreed upon, but this advance pay must not carry interest rate.

2. When the laborer has to temporarily suspend his/her work to discharge his/her citizen duty for one week or more, he/she shall receive advance payment corresponding to the wage of the non-working days, and this advance payment shall be deducted from his/her wage under Article 7 of this Decree.

Article 11.- The advance payment of wage to the laborers under custody or temporary detention under Item 3 of Article 67 of the Labor Code is defined as follows:

1. During the period of his/her temporary custody or detention, the laborer shall receive an advance payment of 50% of his/her wage in the immediately preceding month under the labor contract.

2. After expiry of the term of temporary custody or detention, even if the laborer is found guilty, he/she shall not have to return the above advance payment. If the fault rests with the employer, he must pay fully the wage to the laborer according to the labor contract. If the fault rests with the juridical agency, it must be dealt with according to law.

Article 12.-

1. The payment to the laborer during his/her annual paid leave, the holidays and paid leaves for personal affairs, shall be based on the time wage or the monthly wage (including grade and position wage, area allowance, darkness allowance and position allowance, if any) divided to 26 days and multiplied by the number of regulatory days of paid leave.

2. The payment to the laborers for overtime work and night work corresponds with the payment defined at Article 5 of this Decree.

3. In case of stoppage of work as defined in Item 1 of Article 62 of the Labor Cod, the laborer shall receive work stoppage pay if the stoppage lasts two hours and more.

Article 13.- The wage to serve as basis for calculating the payment according to the regimes of severance allowances, job losing allowances, indemnity for labor accidents and occupational diseases, is the payment according to the labor contract. It represents the average of the six months immediately preceding the occurrence of the affair or accident, and comprises the grade and position wage, area allowance, dearness allowance and position allowance (if any).

Article 14.- The payment during the regulatory paid leave defined at Articles 41, 53, 62, 73, 74, 76, 78 and 92 of the Labor Code is the monthly wage of the immediately preceding month, and corresponds to the form of payment according to the working time defined at Item 1 of Article 5 of this Decree.

Chapter IV

OTHER PROVISIONS

Article 15.- The apprentices and trainees as defined in Item 2 of Article 23 of the Labor Code shall be paid wage if he/she directly manufactures products. The wage is to be mutually agreed upon, but shall not be lower than 70% of the grade wage of the laborer doing the same job.

Article 16.- Women laborers defined at Article 111 of the Labor Code shall be paid the same wage as male laborers for the same job. When a pay rise is to be effected, the woman laborer shall be given priority consideration over a male laborer with the same conditions and standards.

Article 17.- Minor laborers defined at Article 121 of the Labor Code shall receive the same payment as a major laborer doing the same job.

Article 18.- Aged laborers, who are entitled to shorter working time as stipulated in Article 123 of the Labor Code, shall receive full pay.

Article 19.- Handicapped laborers as stipulated in Article 125 of the Labor Code shall receive the same pay as an ordinary laborer doing the same job.

Article 20.- The laborer with a high professional standard stipulated at Article 129 of the Labor Code shall enjoy payment according to the wage table for high-level specialists, experts and artists according to their titles and professional norms. The businesses are entitled to effect a mechanism of payment in order to attract this highly professional labor.

Article 21.- The laborers, who are Vietnamese citizens allowed to go and work abroad in the form of contractors or workers on contract as stipulated at Item 2 of Article 134 of the Labor Code, shall receive part of their pay in the currency of the host country or another convertible currency during their working time abroad.

Article 22.- Basing themselves on the guidance of the Ministry of Labor, War Invalids and Social Affairs, the businesses with foreign investment and the businesses in the export processing zones and the industrial parks are allowed:

1. To work out and apply the system of wage scales and wage tables and the wage levels, wage allowances and the payment regulation which can ensure the interests of all parties.

2. To set the wages of the director (general director), deputy director (deputy general director) and the other key functionaries in the business, and submit it to the Managerial Board for decision.

Article 23.- The Ministry of Labor, War Invalids and Social Affairs shall base itself on the stipulations at Article 136 of the Labor Code with regard to those working in special jobs in the domain of art, and submit to the Government for consideration and decision.

Chapter V

IMPLEMENTATION PROVISIONS

Article 24.- This Decree takes effect as from the 1st of January, 1995.

Article 25.- The Ministers, Heads of ministerial-level agencies, Heads of agencies attached to the Government, and the Presidents of the People's Committees in the provinces and cities directly under the Central Government shall have to implement this Decree.

On behalf of the Government

Prime Minister

VO VAN KIET